Re-Prioritizing the Social Responsibility of Business: A Criticism of Whole Foods' John Mackey

By Christopher Lotito

On September 28th 2005, Whole Foods CEO, John Mackey, blogged a treatise on the importance of ethics as a foundation of business operations (  His position is essentially one of utility and contractarianism, holding that it is most beneficial to business for companies to operate in a manner which is socially conscious.  To be fair, Mackey does seem quite ethically minded himself, though his arguments do not make direct appeals to virtue or other ethical philosophies.

Mackey's post was riveting and compelling, not to mention well-received.  In the wake of the Enron scandal, it soon became a staple of business school and corporate ethics courses.  Yet questions remain about whether or not Mackey's statements go far enough.  For example, Mackey makes statements implying the coercive nature of corporate ethics legislation, advocating at times for what sounds a lot like self-regulation, a model which has been ineffective at halting corporate corruption in the past.

Mackey's post became part of a debate for Reason magazine with Milton Friedman and T.J. Rodgers.  Though plenty others have weighed in, on one side of the other, via comments and letters, it seems appropriate now to add my own voice to the conversation with the benefit of nearly a decade of hindsight.  What follows are my thoughts, which if not perfect, are certainly as worthy of being considered as anyone else's.

“Business social responsibility should not be coerced; it is a voluntary decision that the entrepreneurial leadership of every company must make on its own."
John Mackey, Chairman and CEO of Whole Foods

Coerce - persuade (an unwilling person) to do something by using force or threats.

Mackey’s quote makes a normative statement about the ethics of companies which exemplifies the causes of society’s failure to prevent the Enron scandal from occurring. By most generally accepted definitions of “coerce,” Mackey merely misses the point: whether we wish to or not to do so, few entities in the world (with the clear exception of a couple militant-dictatorships) have the means to force companies to behave ethically. Sarbanes-Oxley provides an excellent weapon against corporate fraud and deception after those acts have already been committed. Such a weapon ensures that America’s future Enrons will either employ teams of lawyers to ensure they fit the letter of the law while disregarding the spirit (and chalking the legal department and bought senators up as a business expense), or that like most petty criminals, those violating the act will be society’s individuals who are simply psychologically incapable of tying their fraudulent profit statements in March of 2015 to their eventual incarceration some 3 to 5 years of investigations and court dates later. There are too many sources indicating the lack of deterrent effect of the criminal justice system upon recidivism (let alone as a deterrent to others) to list here, though Cullen and Goggin’s 1999 paper, “The Effects of Prison Sentences on Recidivism” endorsed by the Office of the Solicitor General of Canada sums this up succinctly, “None of the analysis conducted produced any evidence that prison sentences reduce recidivism.”

Despite the disturbing ineffectiveness of criminal prosecution as a deterrent against crime, the fact remains that Sarbanes-Oxley is not the first law governing the ethical behavior of American businesses to be enacted. While a legal analysis of SEC regulations prior to 2001 is outside the scope of this writing, it is worth noting that Enron did act, since 1985, to build and operate an entire market whose profits they siphoned off by a complex system of accounting loopholes.  In essence, a core part of their business model relied upon circumventing existing SEC regulations.  Had federal agencies chosen to do so, it is likely an investigation of Enron in the 1990’s could have resulted in indictments. After all, Enron management was tried entirely under laws that predate SOX. All of this suggests that while business ethics legislation is an important toolset, without which there could be no legal repercussions for unethical business operations, that these tools are only as good as those who use them, namely the American public.

Though the modern definition holds more malicious connotations, the word coerce has an interesting origin in the Latin roots co and acere, which mean together and restrain respectively. Shall we come together as a society to restrain corporations from violating their social responsibility? Indeed, contrary to Mackey’s statements, we should. The intention of ethical thought is not solely to generate statements about where others have failed at morality, providing some bleak accounting of the world, but to help people to plan their ethical behavior in advance.

While hardly an academic analysis, my grandfather worked for 40 years in the Detroit automotive industry, only to die before knowing most of his grandchildren. When he passed, he left behind a sizable inheritance, the product of decades of hard work, prudent investing, and a lot of saving, scrimping, and personal hardship. One of the larger investments he made was in WorldCom. Between my grandfather’s untimely death and the execution of his will, including the time consuming disposition of his stock holdings, his WorldCom stock became worthless and a part of 40 years of earnings, work, and savings were squandered by CEO avarice. Should we, as a society, have come together to constrain the actions of a corporation which conspired to take the hard earned monies of even educated investors, like my grandfather, who never had a chance to make an informed investment decision because of “accounting loopholes” and questionable bookkeeping? It seems clear that this would have been the virtuous action to take.

Equally, it would have been virtuous to protect the shareholders of Enron, including the grandmothers and single-parents who had invested in the firm via opaque mutual funds through a process they did not fully understand. Lay, Skilling, Fastow, and others at Enron acted as animals in their abuse of shareholders and the market. This is a literal statement, not name-calling, as Enron management’s choices can only be described as the sort of behavior driven by base urges without concern for consequence. Why they did this, whether by congenital mental defect or by a system of mutual psychological reinforcement, is a question for psychologists, but the fact remains that they were aware of the consequences of their actions (including the risk of prosecution) and acted anyway, completely disregarding all implied or stated contract with society as a whole. Enron management seemed driven by pure emotion, even going so far as to create a sick and twisted business environment based upon crude misinterpretations of Darwinian survival-of-the-fittest where rather than developing and retaining talent, they redefined talent as obedience and aggression, firing all who did not fit the mold. This was Enron’s downfall too: had they retained intelligent, ethical, socially concerned employees in 1985, those individuals might have risen through the ranks by the mid-90’s to help balance the corporate culture and move the company away from its business model of extracting money from others through deceit.

In the late 2000’s, the Elie Wiesel Fund for Humanity lost $15.2 million to Bernie Madoff’s ponzi-scheme, again because despite plenty of legislation with the power to imprison white collar criminals after the fact, society failed to come together to restrain Madoff’s firm from unethical business practices before it was too late. We live in a nation where pocket knives, medications, food, livestock, and a thousand other everyday items are already highly regulated for the good of society. Many municipalities have enacted laws stating that it is illegal to place recyclable waste in regular garbage and yet an educated, wealthy individual such as John Mackey is advocating against strict ethics regulation in business.

Mackey’s statements are not entirely without merit. American society would have made great strides indeed if ethical behavior became so ingrained that corporations policed themselves, being sure to fully back pension-funds, disclose the true risk of financial investments without questionable bundling practices like those that caused the real estate meltdown, and in general understand that while CEO’s are concerned about their next bonus check, the average clerk at that same business is concerned about mortgage payments, college debt, and if they’re lucky a family vacation 5 days out of the year at an affordable motor inn. This hope of Mackey’s can perhaps most kindly be described as optimistic.

Idealism aside, Mackey’s quote shows a lack of recognition of the utility of strict ethics regulation, the virtue of a society that does not permit conspiring gangs of white collar criminals to victimize its members, and fails to recognize that if social contracts exist between corporations and the society in which they operate, that society can and should as an equal partner call upon the corporation to uphold its end of the bargain. We should take Mackey’s point and hold it up as the ideal: a self policing and monitoring corporate America, but we cannot expect, or more accurately, bank on that ideal without a combination of laws, regulations, and active social change to help make it a reality.


  1. Gibney, A. (Director). (2005). Enron: The Smartest Guys in the Room [Documentary]. United States: Magnolia Pictures.
  2. Goggin, P., & Cullen, F. (n.d.). The Effects of Prison Sentences on Recidivism. Public Safety Canada. Retrieved January 19, 2014, from
  3. MacKinnon, B. (1995). Ethics: theory and contemporary issues. Belmont, Calif.: Wadsworth Pub. Co..
  4. Rethinking the Social Responsibility of Business: A Reason Debate Featuring Milton Friedman, Whole Foods' John Mackey, and Cypress Semiconductor's T.J. Rodgers. (2005, October 1). Reason, n/a. Retrieved January 19, 2014, from
  5. Strom, S. (n.d.). Elie Wiesel Levels Scorn at Madoff. The New York Times. Retrieved January 21, 2014, from

  At ChristopherLotito.Org, subscribers will find all the information they need to educate themselves and their families about the issues that effect their lives.  A Drew University graduate, Christopher Lotito is a 10 year veteran volunteer within his municipal government in Pequannock, New Jersey.  Lotito is also an accomplished local author and possesses a great depth of knowledge in both New Jersey history and flood control issues which he puts to use as an independent researcher.

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